It’s been a difficult ride for the crypto market through 2022. In November the market was down by more than 70 percent from its previous high at the end of November. And just when things were looking down and down, the FTX crash made them look even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in many ways. This growing demand could lead to more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more everyday people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows finance services built using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase it will be easier for consumers to purchase and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more retailers begin accepting cryptocurrency as a method of payment, it makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long run Being patient and disciplined is crucial.